Entrerpreneurship Essay Example
The important elements of managing rapid growth and overcoming obstacles in an entrepreneurial environment
The decision to start a business venture is an opportunity to either make a breakthrough in accumulating wealth or the start of an activity that could consume one’s resources and leave them in a desperate situation. The following are some of the major challenges that start up businesses must overcome in order for them to grow;
Most people and organizations are faced with limited financial resources when they decide to engage in business. A thriving and vibrant business start up requires huge sums of money, and this has proven impossible for many entrepreneurs. Huge costs are incurred to purchase equipment needed to facilitate the venture. Technology and other related requirements need capital, thereby putting the entrepreneur in a fix. Extensive marketing is also required in order to create product awareness. Entrepreneurs face laxity and unwillingness from the financial institutions in lending them money (Kerr and Nanda 2009). In order to overcome this constraint, the entrepreneur should take time and gather resources together through saving.
Understaffing is another factor that affects entrepreneurs in the event of carrying out their business. It is closely linked to unavailability and insufficiency of the money to meet the demands of the support staff. As such, most entrepreneurs begin with a very limited number of staff most of whom share in the ideas of the venture and understand the limitations faced thereby accepting to work at little pay with the believe that growth will ultimately yield fruits and enhance their pay. Startups involve incompetent staff in most cases since those with a pool of knowledge demand high pays which is not afforded by the new venture. The result is low productivity and poor management, which in turn, affect the success of the venture (Skok 2013). As a result, the business may stay long with little staff if its progress does not flourish. In order to overcome this constraint, the entrepreneur should join forces with like-minded people who see the venture as a chance to prosper in the future.
Poor Understanding of the Role of Marketing is another challenge facing start-up businesses. The entrepreneur should carry a market research before establishing the business so that the activity of marketing will be easier later on and thereby gain customers fast.
Significant sources of information and assistance
The various sources of information for start-up businesses include personal experience and knowledge, internet, prospective market, people (friends, relatives, and competitors), newspapers, books, magazines, observation and business reports. Like the already established firms, starts up businesses have a wealth of knowledge which is embedded in people’s heads, systems, and work practices. According to Terra and Angeloni (2003), this view of knowledge suggests that knowledge does not dwell in the minds of the individual, but also describes the combined effect of individual experience.
Significant entrepreneurial events over the last 50 years
Over the last 50 years, social enterprises have emerged in most parts of the world. Social entrepreneurs involve those individuals with innovative solutions to most of the pressing social problems (Bloom and Chatterji 2009).
Corporate entrepreneurship, on the other hand, is a venture that is exclusively profit driven, unlike social entrepreneurship which is mission driven. They are as a result of downsizing of major corporations, international competition, and the exodus of the brightest talents from large firms to become small business entrepreneurs among other causes.
Over the years, successful entrepreneurs have discovered the need to adopt an innovating culture. From tiny businesses to large, nationwide ones, innovation is the hallmark of success and prosperity. According to Tidd & Bessant (2013), the most successful businesses have realized the challenges and risks existing in the market place. To meet these challenges and successfully operate, they have learned that they must be at the vanguard of innovation. Successful ideas are incorporated into the company’s business operations while those which do not work are modified or discarded altogether. By a process of continually generating new ideas, and testing them in the laboratory of the market, businesses learn what works and what does not meet the business’ purpose. To a great extent, the phenomenal growth of Australia’s banks can be attributed to the power of information technology providing the capability to acquire customers and create innovative products (Tidd & Bessant, 2013).
Over the years, business enterprises have overwhelmingly institutionalized the culture of effective staffing. Research shows that failing organizations do not bother to optimize or improve their staffing practices (Tidd & Bessant, 2013). Over the past 50 years, businesses have been through rigorous and goal oriented transformations under the direction of a focused and results oriented leader.
In every undertaking, there are many uncertainties that hinder the attainment of the set objectives. A risk assessment enables entrepreneurs to assess the uncertainties that can jeopardize an enterprise. The risks associated with a business enterprise consist of both the internal and external. External risks relate to occurrences that are beyond the control of the venture such as government rules, go-slows, inadequate resources, technological changes, poor location and weather. Internal risks, on the other hand, relate to occurrences that results from the venture itself, such as errors, inadequate tax records, and poor advertising among others. The more aggressive businesses have deployed the state of the art technologies to manage risks. For instance, banks throughout Australia have deployed state of the art technologies to manage their increasing number of account holders.
Business growth and expansion is a major objective of many organizations. Even though not all firms endorse growth as their foremost goal owing the responsibilities and challenges that accompany growth, a lot of firms aspire to grow through innovation of new technology. Innovation enables entrepreneurs to take advantage of the gaps in the market, and in turn, come up with an easy mode of transacting, addressing specific consumer needs and addressing changes in customer relations. Researching customer needs is the first and most important step in becoming an innovation-driven business. By researching customer needs, innovation enables an entrepreneur to provide the customer’s immediate needs. To be successful, businesses must constantly be in tune with the customer and to produce only those items that meet his needs. This is the only way to expand business’ share of market and complete the loop in the economic cycle.
Advancement in information communications technology (ICT) has had a major impact with regards to the advertisement aspect of marketing. The available internet advertising for start-up enterprises include ownership of website, email newsletters and the social media. Today, social entrepreneurs are also using paid search advertising in an effort to attract customers. Research also reveals that firms are moving from basic advertising to branded advertising. Barry & Charleton (2009) noted that the most recognized search engines for enterprises are Yahoo, Google and MSN. According to Barry & Charleton (2009) the use of search engines reduces the enterprise’s advertisement budgets. Barry & Charleton (2009) noted that businesses are using social media such as Facebook and Twitter to advertise their products. Social media advertising strengths advocacy of the current clients, attracts new clients, enhances brand visibility on the cyberspace and also, allow entrepreneurs to respond quickly to clients’ demands.
Barry, C & Charleton, D.2009.Business and Telecommunications Communications in Computer and Information Science:
In Search of Search Engine Marketing Strategy Amongst SME’s in Ireland.Vol:4. pp 113-124.
Bloom, PN and Chatterji, A.K. 2009. “Scaling Social Entrepreneurial Impact,” California Management Review. 51:114-133.
Kerr, W.R. & Nanda, R. 2009. Financing Constraints and Entrepreneurship. April 6th 2013. Available at: <http://www.hbs.edu/faculty/Publication%20Files/10-013.pdf>
Skok, D.2012. Why Startups Fail. Accessed on April 6th 2013. From : < http://www.forentrepreneurs.com/business-models/why-startups-fail/>
Terra, J.C. and Angeloni, T. 2003. Understanding the difference between Information Management and Knowledge Management. Paper Presented at The IAMOT Conference, Nancy, France. Viewed On January 8, 2013 from http://www.providersedge.com/docs/km_articles/understanding_the_difference_between_im_and_km.pdf
Tidd, J & Bessant, J. 2013. Managing Innovation: Integrating Technological, Market and Organizational Change, Ed: 5. New York: Wiley.
Vandenberg, P. 2009. Micro, Small and Medium Sized Enterprises and the Global Economic Crisis. International Labour Organization (ILO), Geneva.
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